ORDER
S.S. Sekhon, Member (T)
1. Revenue has filed these stay applications against the order of the Commissioner (Appeals) wherein he has held as follows:
“6. The Adjudicating Authority has also rejected the transaction value in terms of Rule 10A of Customs Valuation Rules 1988 on the that the importer has not produced the manfuacturer’s invoice. In this regard the CEGAT decision in the case of Auto & Hardware Enterprises [003 (151) ELT 330] is relevant wherein CEGAT has held that in order to apply Rule 10A the assessing officer must have reason to doubt the correctness of the transaction value; however, this reason alone would not be conclusive evidence of the incorrectness of the declared value. I find that the law with regard to the valuation of second-hand machines as outlines above has not been followed by the Adjudicating Authority. The grounds on which the transaction value can be assailed have also been outlined above and in the absence of these grounds the transaction value cannot be rejected. Thus in the absence of evidence of contemporaneous imports at higher values or in absence of proof of transaction not being in the normal course of international trade, there can be no conclusive evidence to reject the value. Therefore, rejection of transaction value by the Adjudicating Authority under Rule 10A of Customs Valuation Rules 1988 is not sustainable.
7. Moreover, while rejecting the declared value of the importer it has nowhere been established by the Adjudicating Authority, that the transaction falls within any of the exceptions mentioned in Rule 4 (2) of Customs Valuation Rules, 1988. The Supreme Court in Richer Tractors case [2000 (122) ELT 321 (SC)] has clearly held that the special circumstances have been statutorily particularised in Rule 4 (2) of Customs Valuation Rules 1988 and in the absence of these exceptions it is mandatory for Customs to accept the price actually paid or payable. In view of the same the rejection of the declared values is legally not sustainable. Therefore, the values as declared by the importer are, to be accepted.
8. The issue now remaining before us, is the determination of the quantum of redemption fine and penalty in terms of the direction given by Hon’ble CEGAT South Regional Bench, Bangalore in its order No, 381/2002 dated 15.3.2002. In this regard the appellants have stated that in similar case the Commissioner of Customs (Appeals), Mumbai has imposed redemption fine of 40% of value and penalty of 5% of the value. In this regard they have placed on record the copy of the Order-in-Appeal No. 56/2001-AP LIC (Goa) where redemption fine and penalty have been reduced accordingly. I find that CC (Appeals) Mumbai in the cited case has referred to another OIA No. CUS/4/2001 dated 2.3.2001 of CC (Appeals) Pune in identical case wherein the redemption fine was imposed as 35% of value and penalty as 5% of value. The present case being similar to the referred cases, the redemption fine and penalty are therefore liable to be reduced accordingly. I also find from the Annexure-A to the Show Cause Notice dated 16.7.2002, that the department in its own calculation has taken the importer’s profit @20% on the total of fair import value plus landing charges plus Octroi plus importer’s expenses. On this basis, on the fair import value of Rs. 8023/- as determined by the department, the importer’s margin of profit comes to Rs. 3152/-, which works out to Rs. 339.3% of the fair import value. Thus by the department’s own calculation the margin of profit of the importer is around 40% of the value. The above referred two CC (Appeals)s orders also have imposed redemption fine at the same ratio which is around 40% of value. Thus fixing redemption fine at the rate of 40% and penalty at the rate of 5% in such cases appears to be a very realistic yardstick. Therefore, on this basis redemption fine is reduced to Rs. 1,65,0900/- and Rs. 1,45,000/- respectively and the penalty is reduced to Rs. 21,000/- and R 18,000/- respectively in the two appeals.”
2. The grounds taken by the Revenue are:
(a) The Supreme Court’s decision in the case of M/s Eicher Tractors Ltd was not applicable in view of the introduction of Rule 10A introduced in February, 1998.
(b) The rejection of the Chartered Engineer’s certificate as made by the adjudicating authority has not been appreciated by the Commissioner (Appeals), and
(c) Reliance is placed in the case of BNK Intra Trade Pvt. Ltd v. CC, Chennai 2002 (14) ELT 158 (CEGAT). And
(d) The second ground taken is that the Order-in-Appeal involves a huge Government revenue is at stake and the operation of the Order-in-Appeal would cause grave prejudice to public interest and this Order-in-Appeal will have impact on the future consignments of similar nature causing irreparable loss to the Government revenue.
3. When the matter was called, both sides were heard and the learned Jt C.D.R wisely did not press the grounds, for stay, since it is found that the redemption fines and penalties are reduced by the abovesaid order bringing them at par with practice adopted in the department, as evidenced from Order-in-Appeal No 56/01AP Lic (Goa) and also Order No. Cus/4/2001 dated 2.3.2001 of CC (Appeals) Pune as also in the Show Cause Notice dated 16.7.2002, the Department’s own calculation had taken the importer’s profit at 20% on the total of fair import value plus landing charges plus octroi plus importer’s expenses. Therefore, prima facie the redemption fine and penalties have been worked out, to our mind, in a fair and just manner considering the margin of profit. The value enhancement and the fines are not considerable and the duty at the enhanced value has already been paid as committed by the learned advocate. Therefore, when the issue of fixation of values had to be determined at the final hearing, we find no reason to stay the operation of the Commissioner (Appeals) order, invoking our inherent jurisdiction.
4. Stay applications are consequently dismissed. Matter to come up for hearing in due course.
(Pronounced in Court)